Message:

<p>[QUOTE=&quot;Cloudsweeper99, post: 164032, member: 3011&quot;]Workable plans to convert back to a silver standard already exist and can be taken &quot;off the shelf&quot; at any time.&nbsp; The problem isn&#039;t that nobody knows how to execute the conversion, they just don&#039;t have the will or vested interest to do so.&nbsp; Mexico is currently going through the debate about whether to do this since they have enough silver to make the conversion if it is deemed desirable to try to eliminate some of the enormous poverty of the working class by giving them a currency with actual intrinsic value.&nbsp; Federal government and central bank are against the plan.&nbsp; The state and local governments and businesses generally favor it.&nbsp; It is unlikely to be implemented in my opinion.</p><p><br /></p><p>The basics of the plan involve permitting silver and clad coinage to exist side by side.&nbsp; The silver coins will be struck as a weight and not as a value, for example, as one ounce legal tender coins.&nbsp; The currency value of the coins will be posted and changed periodically by the government the way interest rates are today.&nbsp; Only three things are required to make this plan work.&nbsp; First, the initial value of the silver coins must be set above the current price of silver, say at $20 per one ounce coin [in US dollar terms].&nbsp; This makes it uneconomical to melt the coins while at the same time providing a coin with an intrinsic value greater than the clad coins.&nbsp; Second, if the fiat price of silver ever rises above that amount, the official excange value of the silver coins will be increased to or above the new exchange amount.&nbsp; Third, once increased, the legal tender exchange value of the silver coins can never be decreased under any circumstances.&nbsp; The revaluations will be all in one direction, up for silver.&nbsp; The hoarding argument is frequently raised, but is really a non-issue.&nbsp; Of course people will exchage the clad and save the silver.&nbsp; But since the entire purpose of silver coinage is to permit people to own and save monetary units with actual value that cannot be easily eroded by inflation, this is a positve feature and not the negative feature envisioned by some.&nbsp; The primary opposition to the plan will always be the Federal Reserve in the US and central banks everywhere, because silver coinage is a powerful competitor to their primary product, paper money with no intrinsic value that can be created in unlimited quantities at will.</p><p><br /></p><p>The argument that there isn&#039;t enough silver [or gold] in the world to use as money may or may not be true.&nbsp; The goal doesn&#039;t have to be to replace the existing currency in its entirety, but only offer a substitute to trade side by side that cannot be destroyed by government mismanagement of the currency.&nbsp; To a certain extent, this is what is going on anyway as people collect gold and silver bullion coins.&nbsp; Also keep in mind that a relatively small face value amount of currency can support a very large amout of commerce.&nbsp; The $11trillion GDP US economy is supported by about $900billion in fiat currency [or something in that range, which I didn&#039;t look up for this post].&nbsp; There is also the alternate argument proposed by some people that the market price of silver and gold would be many many times higher than today if restored as coinage, thus requiring fewer ounces to replace the fiat currency than is required at current exchange rates.</p><p><br /></p><p>But it&#039;s never going to happen so the entire possibility remains pretty theoretical, but interesting.[/QUOTE]</p><p><br /></p>

Your name or email address:

Do you already have an account?

• No, create an account now.
• Yes, my password is:
• Forgot your password?

Stay logged in